President Donald Trump has recently launched a series of broadsides against the Federal Reserve, bashing its interest rate hikes.

Speaking to reporters before a rally in Erie, Pennsylvania on Wednesday, the president attempted to pin the recent stock market sell-off on the central bank and its chairman, Jerome Powell.

“I think the Fed is making a mistake,” Trump told reporters. “They are so tight. I think the Fed has gone crazy.”

In a subsequent interview on Fox News, Trump also called the Fed’s recent rate hikes “loco.”

Trump continued the attacks on Thursday during a bill signing in the Oval Office, telling reporters the Fed is “making a mistake and it’s not right.”

“It’s a correction that I think is caused by the Fed and interest rates,” he said.

This isn’t the first time Trump has taken aim at the Fed. The president launched volleys at Powell and the Fed in in July and August.

While the White House attempted to assuage concerns by reiterating the president’s support for the Fed’s independence, the comments raise the spectre of a huge policy mistake made in the 1970s.

Richard Nixon, the Fed, and stagflation

The Federal Reserve’s structure is unique within the US bureaucratic system. It operates within government but simultaneously remains relatively independent, with only some oversight from Congress.

The Fed’s independence is couched in the belief that for a central bank to achieve its aims – ensuring financial stability and long-term growth – it should be free from the pressure that might be exerted by politicians seeking to alter policy for their own ends, rather than putting the country’s prosperity first.

The most notable example of a president violating this edict of independence occurred under Richard Nixon in the 1970s.

In the run-up to the 1972 election, Nixon wanted to present the country with a strong economy and low unemployment. To do so, Nixon swapped out Fed Chairman William McChesney Martin with his pick, Arthur Burns.

Other incidents, including President George H.W. Bush complaining about the policies of his Fed chair, Alan Greenspan, have also occurred, but Bush’s comments were far more muted than Nixon’s extended pressure.

Defenders of Fed independence point to the Nixon example to support their argument that politicians should not attempt to tamper with monetary policy. There is also empirical evidence to support this claim.

Gregory Daco, chief US economist at Oxford Economics, pointed to research by Alberto Alesina and Lawrence Summers that showed in countries with a politically influenced central bank had higher inflation.

“While reviewing 16 OECD economies, they showed that countries with independent central banks generally had lower inflation without ‘suffering any output or employment penalty’,” Daco said. “As such, central banks acting outside of the political sphere of influence would be most desirable in any country.”

While Trump is far away from Nixon’s level of interference, Daco said it is an important theme to keep an eye on.

“While current conditions are very different from those of the 1970s, we must not forget that the premise of central bank independence rests on the advantage of insulating monetary policy from short-sighted political objectives,” he said. “While inflation expectations are currently well anchored, history shows us that a pervasive lack of central bank independence can rapidly, and without warning, lead to rising inflation and economic instability.”